Trader Joe's buys Daytona site for $7.8M; distribution center planned

Published: Friday, August 15, 2014 at 8:13 p.m.

Last Modified: Saturday, August 16, 2014 at 11:48 a.m.

DAYTONA BEACH — Trader Joe's has taken a big step toward committing to building a regional distribution center here that would create more than 500 jobs.

The Monrovia, California-based national upscale grocery chain on Friday completed a $7.8 million purchase of a 76-acre parcel in Daytona Beach, just east of Interstate 95, where it has been considering building the nearly 800,000-square-foot complex.

The closing of the real estate transaction was announced late in the day by the property's seller, Daytona Beach-based Consolidated-Tomoka Land Co., but the announcement did not name the buyer.

The buyer, however, is identified in building permit application documents and in an agreement with Volusia County as “Trader Joe's East Inc.”

Mark Patten, the chief financial officer for Consolidated-Tomoka, said his company is bound by a confidentiality agreement signed with the buyer to not identify it by name, but acknowledged “the name is out there” in those documents.

Patten added that the buyer is expected to bring in its own construction company to build the distribution center, with the initial phase — two refrigerated distribution buildings and a maintenance facility totaling a combined 650,000 square feet — likely ready for occupancy by late 2015.

Patten said that completion date is an estimate by his company and that the actual timetable for construction of the project will be up to the property's new owner.

Consolidated-Tomoka also announced Friday that it has received $400,000 from the CEO Business Alliance, a private group of local business leaders, as reimbursement for a portion of the money the company spent to prepare the “pad site for vertical construction” as part of an incentive package to entice the buyer — i.e., Trader Joe's — to commit to buying the property and building the complex.

The alliance, which is entirely funded by its members, includes Lesa France Kennedy, the CEO of International Speedway Corp., Brown & Brown Chairman Hyatt Brown and John Albright, Consolidated-Tomoka's own CEO.

Volusia County has already agreed to provide incentives to Trader Joe's, as well as $1.1 million to Consolidated-Tomoka, if and when certain milestones are met: the completion of the project's initial buildings and the creation of local jobs.

The state and city also have agreed to provide incentives to Trader Joe's if it carries out its plans to build the distribution center here and meets its hiring targets.

Team Volusia Economic Development Corp. also had a hand in the efforts to attract the buyer of the development site, according to the news release from Consolidated-Tomoka.

The News-Journal was not able to reach Trader Joe's officials for comment.

Patten said it would be “reasonable and appropriate” to assume that the company's purchase of the property signals its intent to build the regional distribution center here.

“They're not going to buy a piece of land for $7.8 million and not build on it,” he said.

Kent Sharples, president of the CEO Business Alliance, said his group was “delighted with the opportunity to add our contribution to the incentive package.” The funds provided by the alliance came entirely “from the checkbooks” of its members, he added.

He also acknowledged that after several months of negotiations with Trader Joe's, he felt a sense of relief now that the national grocery chain has committed to buying the development site. “Every step taken puts us closer to creating the 400-plus new jobs. That's the real goal,” he said.

Consolidated-Tomoka's role in the efforts to attract the buyer, said Patten, included agreeing to sell the site at a “significantly discounted land price and preparing the site for construction.”

Site preparation work, which included grading the land, began in May at a cost of $1.6 million to Consolidated-Tomoka, according to statements made to The News-Journal that month by company officials.

The development site is part of Consolidated-Tomoka's roughly 500-acre Gateway Business Center development area, which stretches from Dunn Avenue on the south to just north of LPGA Boulevard, between I-95 and Williamson Boulevard.

The distribution center is expected to create 450 jobs at the center as well as more than 100 additional jobs for delivery drivers.

Volusia County this fall is set to begin a $3 million road improvement project, also related to the Trader Joe's project, that is jointly funded by the county, state and city and will extend Mason Avenue south through the Gateway Business Center to Dunn Avenue and create access roads to the Trader Joe's site from Mason and Dunn avenues. Turn lanes also will be added from Dunn Avenue to the site, Gerald Brinton, Volusia County engineer, told The News-Journal in May.

<p>DAYTONA BEACH — Trader Joe's has taken a big step toward committing to building a regional distribution center here that would create more than 500 jobs.</p><p>The Monrovia, California-based national upscale grocery chain on Friday completed a $7.8 million purchase of a 76-acre parcel in Daytona Beach, just east of Interstate 95, where it has been considering building the nearly 800,000-square-foot complex.</p><p>The closing of the real estate transaction was announced late in the day by the property's seller, Daytona Beach-based Consolidated-Tomoka Land Co., but the announcement did not name the buyer.</p><p>The buyer, however, is identified in building permit application documents and in an agreement with Volusia County as “Trader Joe's East Inc.”</p><p>Mark Patten, the chief financial officer for Consolidated-Tomoka, said his company is bound by a confidentiality agreement signed with the buyer to not identify it by name, but acknowledged “the name is out there” in those documents.</p><p>Patten added that the buyer is expected to bring in its own construction company to build the distribution center, with the initial phase — two refrigerated distribution buildings and a maintenance facility totaling a combined 650,000 square feet — likely ready for occupancy by late 2015.</p><p>Patten said that completion date is an estimate by his company and that the actual timetable for construction of the project will be up to the property's new owner.</p><p>Consolidated-Tomoka also announced Friday that it has received $400,000 from the CEO Business Alliance, a private group of local business leaders, as reimbursement for a portion of the money the company spent to prepare the “pad site for vertical construction” as part of an incentive package to entice the buyer — i.e., Trader Joe's — to commit to buying the property and building the complex.</p><p>The alliance, which is entirely funded by its members, includes Lesa France Kennedy, the CEO of International Speedway Corp., Brown &amp; Brown Chairman Hyatt Brown and John Albright, Consolidated-Tomoka's own CEO.</p><p>Volusia County has already agreed to provide incentives to Trader Joe's, as well as $1.1 million to Consolidated-Tomoka, if and when certain milestones are met: the completion of the project's initial buildings and the creation of local jobs.</p><p>The state and city also have agreed to provide incentives to Trader Joe's if it carries out its plans to build the distribution center here and meets its hiring targets.</p><p>Team Volusia Economic Development Corp. also had a hand in the efforts to attract the buyer of the development site, according to the news release from Consolidated-Tomoka.</p><p>The News-Journal was not able to reach Trader Joe's officials for comment.</p><p>Patten said it would be “reasonable and appropriate” to assume that the company's purchase of the property signals its intent to build the regional distribution center here.</p><p>“They're not going to buy a piece of land for $7.8 million and not build on it,” he said.</p><p>Kent Sharples, president of the CEO Business Alliance, said his group was “delighted with the opportunity to add our contribution to the incentive package.” The funds provided by the alliance came entirely “from the checkbooks” of its members, he added.</p><p>He also acknowledged that after several months of negotiations with Trader Joe's, he felt a sense of relief now that the national grocery chain has committed to buying the development site. “Every step taken puts us closer to creating the 400-plus new jobs. That's the real goal,” he said.</p><p>Consolidated-Tomoka's role in the efforts to attract the buyer, said Patten, included agreeing to sell the site at a “significantly discounted land price and preparing the site for construction.”</p><p>Site preparation work, which included grading the land, began in May at a cost of $1.6 million to Consolidated-Tomoka, according to statements made to The News-Journal that month by company officials.</p><p>The development site is part of Consolidated-Tomoka's roughly 500-acre Gateway Business Center development area, which stretches from Dunn Avenue on the south to just north of LPGA Boulevard, between I-95 and Williamson Boulevard.</p><p>The distribution center is expected to create 450 jobs at the center as well as more than 100 additional jobs for delivery drivers.</p><p>Volusia County this fall is set to begin a $3 million road improvement project, also related to the Trader Joe's project, that is jointly funded by the county, state and city and will extend Mason Avenue south through the Gateway Business Center to Dunn Avenue and create access roads to the Trader Joe's site from Mason and Dunn avenues. Turn lanes also will be added from Dunn Avenue to the site, Gerald Brinton, Volusia County engineer, told The News-Journal in May.</p>